Vietnam's Economy Set to Rebound in 2022

In 2021, the Vietnamese economy faced many difficulties when Covid-19 broke out nationwide. Entering 2022, economic growth will have many opportunities and also challenges due to the complicated pandemic situation.
January 02, 2022 | 23:18
Vietnam's Economy Set to Rebound in 2022
Nguyen Thi Huong, general director of the General Statistics Office of Vietnam.

The Vietnam Times interviewed Nguyen Thi Huong, general director of the General Statistics Office of Vietnam to share more details about Vietnam's economy.

There are challenges, but also many opportunities

Many forecasts suggest that the world's economic growth in 2022 will be lower than in 2021. Domestically, the resilience and resources of businesses and people have decreased. Therefore, what is the motivation to successfully implement the economic growth target of 2022 that has been approved by the National Assembly?

Nguyen Thi Huong: The economic growth target in 2022 from 6.0-6.5% set by the National Assembly is quite challenging in the context that our country has been affected by the Covid-19 pandemic since the beginning of 2020 to now.

In 2022, it is forecast that the pandemic situation may not be completely over, due to the unpredictable appearance of new strains such as Omicron. Market services industries have not yet fully recovered, but could outperform 2021 better by adapting to the new normal.

Therefore, the economic growth target in 2022 can be successfully achieved thanks to the following motivations:

Vietnam's economy continues to inherit the results achieved from the implementation of the 10-year socio-economic development strategy 2011-2020.

Macroeconomics and major balances of the economy are basically stable, creating a premise for flexible and effective management of fiscal and monetary policy.

The direct and drastic fiscal and tax policy packages are an opportunity for businesses and people to quickly access stability and restore production.

Domestic demand recovered and increased gradually, because our country has achieved a relatively complete vaccination rate of 2 doses for the vast majority of people, ensuring that consumers can participate in a safer shopping market.

Inflation is not expected to increase. Although some goods and materials have increased in price, they are still under control. Therefore, they do not put pressure on production and business activities.

The trend of development and expansion of investment in high-quality healthcare and education services will increase in the contribution of the health sector, education, and the market service industry to the growth of the whole economy.

In the context of the pandemic, many industries and fields have turned to information technology applications, taking advantage of the achievements of the Industry 4.0. From there, it creates new forms of production and business activities, integrating technology that will give higher productivity, quality and efficiency.

Implementing basic solutions for rapid growth

For Vietnam's economy to continue to grow in 2022, what do you think Vietnam needs to do right away?

Nguyen Thi Huong: To achieve the growth target set by the National Assembly, it is necessary to immediately implement the following basic solutions:

Vietnam needs to continue to control the pandemic. Specifically, it is necessary to strictly comply with the pandemic prevention regulations of the Ministry of Health.

When Vietnam can control the pandemic well, it is possible to minimize damage, reduce remedial costs, and restore production and business sectors directly affected by the Covid-19 pandemic.

We need to exploit the domestic market. The domestic market will still be a safe place for Vietnamese businesses to maintain operations and prepare to participate when the world market stabilizes.

In addition, to stimulate consumption and revive production, it is also necessary to focus on public investment, develop a number of key industries, create jobs, and help domestic production develop.

Vietnam needs to deploy an economic stimulus package to support production, business and jobs.

This should be implemented early and effectively for businesses, and workers directly affected by the pandemic.

On the business side, it is necessary to be more proactive in learning about the EVFTA; strengthen cooperation, mutual support, change management and business thinking, and link to form production and business chains to be able to gather enough resources to face competitive pressure.

Vietnam's Economy Set to Rebound in 2022
Photo: Money Daily

Continuing to control inflation

What is your view on Vietnam's inflation control in 2022?

Nguyen Thi Huong: In 2021, in the context of increasing global inflationary pressure, the price of raw materials, input materials for production, and transportation costs continuously increase.

However, Vietnam's average consumer price index (CPI) in 2021 only increased by 1.84% over the previous year, the lowest in the past 6 years, reaching the target set by the National Assembly.

To achieve this result while the country is facing great difficulties due to the impact of the Covid-19 pandemic, it is thanks to the close direction of the Government and sectors, that have implemented synchronous solutions to prevent the pandemic and stabilize market prices.

However, entering 2022, we assess that inflation pressure will be very large. When the Covid-19 pandemic is controlled in 2022, production and consumption demand will increase, inflation will be affected by increasing prices of raw materials throughout the world.

Importing raw materials at high prices will affect production costs and product prices, thereby pushing up the prices of domestic goods, putting pressure on inflation.

In addition, the increase in import prices of animal feed and raw materials will affect food prices. The price of housing maintenance materials included in the CPI will also increase with the price of materials used in construction.

When the Covid-19 pandemic is under control, the demand for food services, tourism services, and entertainment will increase again, which will also have a significant impact on the overall CPI.

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